Assessing the Impact of Recent Trade Policy Changes in the Banana Market under Alternative Market Structures

The paper focuses on the importance of the assumptions made about market structure and firm behaviors in empirical trade policy analysis. It does it with reference to the most recent changes in the EU import regime for bananas, namely the Economic Partnership Agreements and the December 2009 WTO agreement on bananas. The paper’s contribution to the literature on the issues addressed is threefold: it develops two original models which incorporate imperfectly competitive market structures in a spatial modeling framework; it provides an assessment of the degree of market power in international banana trade and, finally, it assesses how the analysis of the implications of the most recent changes in the EU import regimes for bananas is affected by the assumptions made regarding the prevailing market structure.